Esperance Bay Orchards world first AI organic pack-house
AI tech is saving a family apple farm in southern Tasmania hundreds of thousands of dollars by detecting the internal quality of fruit and limiting food waste.
Among the picturesque rolling green hills of the Huon Valley in Tasmania’s south is a fifth generation family business leading the world in on-farm innovation.
Malcolm Francis, his parents Murray and Faye, sister Nicola and brother Leigh, own and manage Esperance Bay Orchards, which earlier this year became the first organic apple pack-house in the world to use self-learning artificial intelligence technology.
It is able to detect the internal quality of organic fruit and limit food waste by reducing rejections, saving hundreds of thousands of dollars annually in lost produce and labour.
Investing in new tech has helped the horticulture business thrive in a time of tough market conditions where curbing costs is key to survival.
THE DRIVING FORCE
The Francis family operate 81 hectares of orchard – predominantly producing organic apples and pears for fresh markets on the eastern seaboard, but also supplying Bellamy’s Organic baby food range.
They have 250,000 to 300,000 trees – managed by 16 full-time staff that peak at 90 when seasonal work with thinning, pruning and harvesting ramps up.
Varieties are consumer driven and include all the popular mainstream options such as gala, pink lady, granny-smith and fuji, but there is a move towards some newer varieties more suited to trellis systems, which reduce labour inputs and increase cost efficiencies for commercial viability.
“Eventually everything will be on trellis,” Malcolm said.
“That is the ultimate aim within the next five to 10 years, to develop more automation in the orchards to reduce the costs.
“When we had the change in labour rules, rates went from per bin to per hour and it doubled our cost to harvest so we need to refine and reduce that to keep costs down at retail level.”
RISK AND REJECTION
As new orchards were planted, the trellis system was refined to be bigger, stronger and taller to increase canopy size and density, and to allow for automation in robotic harvesting equipment moving forward.
It averages $50,000 per hectare to replace trellis, double the pre-covid figures.
Up to 80 per cent of new varieties that came onto the market failed based on consumer uptake. Marketing fees and low returns also made it difficult for growers and packers.
The Francis’ have been certified organic for 20 years and despite the extra workload required to produce under the strict parameters, don’t receive big price premiums.
“Organics is not for the faint hearted,” Malcolm said.
“It’s not easy, it’s not even any more profitable, but it becomes more of a lifestyle and an opportunity to grow clean food, which is something you have in your focus, particularly for the consumers of Australia.”
SPEND IT TO MAKE IT
The Francis property is located on the waterfront at Esperance Bay with favourable climate conditions and high quality sandy loam soils with limited risk of pests and diseases.
Apples are grown over a six-month period from spring onwards and are harvested over a three month window.
Once harvested, all produce goes into controlled atmosphere coolrooms before being packed fresh for the market.
Production costs have doubled in the past five years, forcing the Francis family to zero in on ways to remain viable.
“It is a tough time to be in business full stop,” Malcolm said.
“With apples it is a very flooded market across the board – whether organic or conventional – and it is tough to be commercially viable.
“We are growing berries and cherries and playing around with different value adding opportunities and other avenues to continue the generational business.
“You have to continue to spend money to make money and things are moving so fast in terms of technology, it makes it really challenging.”
OFF THE GRID
They have an ambitious plan to be completely off-grid within the next two to three years via an extensive solar and battery storage system. The implementation hasn’t been cheap but is expected to pay for itself within three years.
“Power costs are only getting higher and higher, it is an area we need to manage,” Malcolm said.
“In business at the moment, the end game is controlling your outcomes and knowing that in the next six months we aren’t going to get an email from our power provider to say there is going to be a 25 per cent increase in your power.”
Sustainability efforts also include transitioning from gas and petrol forklifts to electric, installing LED lighting, and working with suppliers in Spain to create a fully compostable paper packaging for punnets rather than plastic film. However, the cost is currently 12 to 13 times higher than plastic.
“We will have to get there eventually but consumers need to be aware that it comes at a cost financially and needs to be commercially sustainable,” Malcolm said.
TECH PACKS PUNCH
In 2023, the Francis’ received a $440,000 grant through the Coles Nurture Fund to invest in AI grading technology.
They retrofitted an AI grading system to the pack-house and every piece of fruit now passes through a camera box as it comes over the sizing lanes.
Twelve pieces of fruit per second run under the cameras, which are dialled into the stem end of the apple. Defects a human eye would normally miss, are picked up and thrown out automatically.
The machine is self-learning based on previous scans of the exterior surface of the fruit, and able to dial into detailed customer specifications.
“If our customers permitted only a certain bruise depth or a certain amount of marking on the fruit, we can dial the machine in to be right on that threshold to maximise those pack outs,” Malcolm said.
“We are reducing waste from human error and we are taking the risk right out of the equation when running fruit over our grading lines.”
It has replaced the need for seven staff and already proven to be an invaluable new asset.
“It is so good at what it does,” Malcolm said.
“Our level of grading with zero manual staff grading by eye is now at 99 per cent accuracy.
“We are increasing consumer confidence, reducing waste and the risk of return product for not meeting specifications. It is a win-win situation and a very successful install.”
AHEAD OF THE PACK
The Francis’ were the only pack-house in Australia with AI grading at the time of installation and the only shed in the world with organic AI grading.
“Technology like this can make or break a business in my view,” Malcolm said.
“Our reduced labour inputs are massive. To me, that shows scope and business growth based on increasing consumer confidence and buyer confidence that you are able to do the job and do it right – when they order, meeting spec is likely.”
Accepting and implementing new tech and innovations to increase efficiencies was imperative for future viability.
“I think the majority of farms will be managed from a control room in 10 years,” Malcolm said.
“We’ve seen autonomous mowers and sprayers, pruning and harvest options, control rooms are where it’s at.
“Where technicians come on site at great cost will be a thing of the past when we can now have them log into our PC from Holland and fix things.
“Technology is creating more efficiencies in general operations and it is just a matter of keeping up.”
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